Weekly Seminar Series: Serena Chellini
Apr 25, 2025
11:00AM to 12:30PM
Date/Time
Date(s) - 25/04/2025
11:00 am - 12:30 pm
Serena Chellini, PhD Candidate from KU Leuven in Belgium, will present to our economics graduate students and faculty on Friday, April 25 in KTH 334!
Serena’s research is in international trade and environmental economics. She is a co-organizer of the Leuven-Louvain Trade Workshop and is currently a guest of Jevan Cherniwchan, who will be hosting her seminar. She will be presenting the paper, “From Dirty to Green: How Input Liberalization Shapes Firms’ Emissions in Trade“.
Abstract
This paper examines the impact of input trade liberalization on firms’ incentives to alter the green composition of their trade. Using the Colombia-US Free Trade Agreement (FTA) as a quasi-natural experiment, we investigate the impact of input tariff reductions on Colombian firms’ sourcing decisions and trade-related emissions. The research draws on a unique firm product-level dataset for Colombia, alongside data on the emissions embedded in firms’ intermediate inputs. The analysis reveals a pre-existing environmental bias in trade policy, where lower input tariffs were applied to emission-intensive products before the implementation of the FTA. Due to the FTA’s tariff harmonization, Colombian firms importing from the US benefit from greater tariff reductions on less emission-intensive inputs, prompting a reconsideration of their product portfolios. We find that tariff differentials prompt firms to increase the use of liberalized greener inputs and subsequently alter the emission intensities of their trade. Specifically, higher tariff differentials on less emission-intensive inputs incentivize firms to increase their use, leading to a notable shift in output composition. Over time, we observe a decline in emissions at the firm-level, coupled with a reduction in the trade share of emission-intensive products.